S&P/TSX composite closes up nearly 1.9%, US markets also rise

Canada’s main stock index rose nearly 1.9% as commodity prices rose, US markets rallied and August job loss reports showed. Bank of Canada The increase in interest rates is having the effect of slowing down an overheated economy.

The unemployment rate rose to 5.4% in August, up for the first time in seven months as the Canadian economy cut 40,000 jobs, Statistics Canada reported Friday.

Anish Chopra, chief executive officer of Portfolio Management Corp, said the high unemployment rate, from a decade low of 4.9% in July, could contribute to a correction in interest rate hikes. Future.

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S&P/TSX composite closes higher along with US markets despite falling oil prices

“You start to see job losses, and that’s the result of the Bank of Canada raising interest rates. And so now the Bank of Canada must be more balanced in their approach. They will still raise prices, but it will probably be slower when they do. “

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The possibility of rate easing helped push the S&P/TSX composite up 360.34 points to close at 19,773.34 in a broad-based rally.

Growth stocks, including the information technology and healthcare sectors, led the way, gaining 3.3% and 4.2%, respectively.

Shopify Inc. rose 8.2% on the day following the announcement of the leadership shuffling, while it could also be boosted by a wave of enthusiasm for growth-oriented stocks like tech in the US witnessed ​Microsoft was up 2.3% and Amazon was up 2.6% cents.

Energy stocks continued to recover along with fossil fuel prices, with the October crude contract up $3.25 at $86.79 a barrel and the October natural gas contract up 8 cents in at $8.00/mmBTU.

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S&P/TSX composite edges slightly higher due to oil price escalation

Overall, the S&P/TSX energy index gained 2.65%, including a 3.4% gain from Canadian Natural Resources Ltd. and 3.3% from Cenovus Energy Inc.

The base metals index rose 3.7% as December contract rose 4 cents to $3.57 an ounce, while December gold futures rose $8.40 at $1,728.60 an ounce. .

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The US market also rallied as investor sentiment surrounding the recession and interest rate hikes shifted against the pessimistic outlook in recent weeks, Chopra said.

“You’ve got signs of an economic slowdown in Europe, as well as China. There are signs that higher interest rates and tighter monetary policy are starting to take effect in the US,” he said.

“So what you have in the US is somewhat like Canada, with the economy slowing down, investors tend to go back to investing in growth stocks and that’s where you have companies like Apple, Alphabet, Amazon and Tesla today.”

The Dow Jones Industrial Average rose 377.19 points to 32,151.71. The S&P 500 index rose 61.18 points to 4,067.36, while the Nasdaq composite rose 250.18 points to 12,112.31.

The Canadian dollar traded for 76.72 US cents versus 76.24 US cents on Thursday.

© 2022 Canadian Press

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